AMD Confirms & Details Split

Following on from the all-but-confirmed rumour, AMD has confirmed that it is indeed spinning off its manufacturing operations into a separate organisation. Speaking in a conference call earlier today, the company explained that it will be doing so in partnership with Abu Dhabi's Advanced Technology Investment Company (ATIC).
The combined effort will take on the temporary name of The Foundry Company (more a description than a moniker) with the actual identity being unveiled once AMD and ATIC think of a good one early next year once the deal is fully closed.

As the WSJ predicted, Doug Grose, AMD's senior VP of Manufacturing Operations, will take the position of CEO at The Foundry Company, with Hector Ruiz, AMD Executive Chairman and Chairman of the Board, becoming merely Chairman.

ATIC is to pay AMD $700 million for a 55.6 per cent stake in The Foundry Company, with AMD taking the remaining share. However, despite having a lower stake, AMD will have equal voting rights to ATIC on the company's board.

The Foundry Company will take on somewhere between $1.2 and $1.3 billion of debt previously held by AMD. ATIC is set to invest some $1.4 billion in the construction of a new foundry, dubbed Fab 4X, in New York and is committed to the further investment of at least $3.6 billion and up to $6 billion over the next five years.

While AMD loses it's Dresden fabs as a result of this separation, it will "have an exclusive supply agreement with The Foundry Company, with limited exceptions, to manufacture AMD processors and to manufacture, where competitive, certain percentages of other AMD semiconductor products." More importantly the new, leaner AMD will be in a much stronger financial position that it currently is, which should in theory allow it to better focus on the important business of designing Intel-rivalling silicon.